If you have also done FD in the bank then know this important thing, otherwise there will be big loss

Last Updated on June 13, 2021 by Vishvesh Dave

Fixed Deposit It is the most preferred investment option of people in all types of savings plans. People of all ages love this method of saving. The big reason for this is that it is safer and less risky than other schemes. It can also be used for short to long term investments. Today we are going to give you a lot of information including FD related rules, taxes, keeping in mind that you can easily avail this savings plan better.


There are two types of FDs

There are usually two types of FDs. The first is cumulative FD and the second is non-cumulative FD. Interest is paid quarterly and annually. However, you can also earn interest at regular intervals.

These are the benefits of investing in a fixed deposit

Fixed deposit is considered as one of the safest investment options.

There is no risk on the principal amount deposited in this. With this, you can also get a refund in a fixed period.

The principal amount invested in it remains safe as there is no direct effect of market fluctuations on FDs.

Under this scheme, investors can avail monthly interest.

The interest rates available on FDs are usually higher. For senior citizens, it offers the highest returns.

You only have to invest once in any FD. If the investor wants to make more deposits after this, he will have to open a separate FD account.

FDs have a maturity period, you have to deposit money for so many years. But the advantage of this is that you can also withdraw money ahead of time if needed. However, if you break the FD before maturity, you will lose interest and will have to pay a small penalty. Which is different in different banks.

What is the rule of tax deduction on FD

There is a tax deduction of 0 to 30 per cent on a fixed deposit. It is deducted on the basis of the investor’s income tax slab. If you earn more than Rs 10,000 in a year, you will have to pay 10 per cent tax on your FD. However, for this you will have to submit a copy of your PAN card. If PAN card is not submitted, 20 per cent TDS is deducted on it. If the investor wants to avoid tax deduction, they should submit Form 15A to their bank for this. This applies to those who do not fall into any income tax slab. Senior citizens should submit Form 15H to avoid tax deductions.


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